Andrew Good's picture


  by  Andrew Good

wonderful story by Hope Yen of the Associated Press yesterday leveraged government data to show yet another angle of the ongoing economic situation in America:

Overall, more than 16 percent of adults ages 16 and older are now "underutilized" in the labor market - that is, they are unemployed, "underemployed" in part-time jobs when full-time work is desired or among the "hidden unemployed" who are not actively job hunting but express a desire for immediate work.

Among households making less than $20,000 a year, the share of underutilized workers jumps to about 40 percent. For those in the $20,000-to-$39,999 category, it's just over 21 percent and about 15 percent for those earning $40,000 to $59,999. At the top of the scale, underutilization affects just 7.2 percent of those in households earning more than $150,000.

By race and ethnicity, black workers in households earning less than $20,000 were the most likely to be underutilized, at 48.4 percent. Low-income Hispanics and whites were almost equally as likely to be underutilized, at 38 percent and 36.8 percent, respectively, compared to 31.8 percent for low-income Asian-Americans.

Loss of jobs in the recent recession has hit younger, less-educated workers especially hard. Fewer teenagers are taking on low-wage jobs as older adults pushed out of disappearing mid-skill jobs, such as bank teller or administrative assistant, move down the ladder. 

Yen painted a clear picture of what is happening across the nation, piling on statistic after hard-hitting statistic into her reporting here. No doubt the vast majority of her readership will appreciate the validation of what Americans everywhere already know: we have a jobs crisis - a perturbing surplus of labor and a worryingly pervasive trend of tepid job creation paired with a withering of middle class wages.

Unfortunately, readers will have no reason to leave the piece with any optimism, as the lame solutions weakly offered are either uninspiring retreads or hopeless pipe-dreams. Naturally, a mention of our historic high immigration levels was AWOL.

President Obama offered, "We have to make the investments necessary to attract good jobs that pay good wages and offer high standards of living." The nearly $1 trillion stimulus package passed in the early days of the recession does not have the U.S. on a job creation path that will ever result in full employment again. In fact, without changes to immigration policy, the economy would need to create an average of 282,000 jobs every month for the next five years. That's an average of 40,000 more jobs per month than were created during the 1993-2000 boom (when taking into account the still-high U-6 rate and the distressingly low workforce participation rate, these numbers should still be close - witness this WaPo story from last year about needing 200,000 jobs/month for eight years).

So what "investments" will attract (it is curious that "attract" as opposed to "create" was the word choice here) these jobs? Presuming that government is the one doing the investment (and with what money, considering the public wants deficit reduction more than anything?) can anyone think of what public works projects would actually put millions of people to work on a career-long basis? This is a tired trope that virtually everyone outside the beltway has tuned out.

Meanwhile, the President's number one domestic policy aim for his second term is the push to immediately provide blanket legal work permits (with citizenship promised at a later date) and a colossal permanent increase in legal immigration and guest workers. Needless to say, Sen. Sessions has a much more believable argument on what this will do to wages than the Cirque du Soleil-style contortions of the open borders brigade.

Richard Freeman, a Harvard economist, didn't hold out much hope for the prospects of wage increases or increased job opportunities for workers in the near future. He yearned for a more-quickly growing economy and stronger unions (good luck with that). If he made mention of our immigration-fueled oversupply of labor, Yen doesn't mention it (Freeman has done academic study with fellow Harvard economist George Borjas in the past).

Income inequality and the deterioration of the middle class are existential questions about the American future. The Associated Press does well to devote time and ink to informing us all about our present condition. But it is dismaying that a discussion of our labor force woes ignores the most macro-level factor there is, namely: how many workers there are and will be. This is even more disappointing coming from Yen, who noted in a September 22, 2011 story on the impact of the recession on younger workers:

The District of Columbia plus 14 states had the largest ratios of college graduates to high-school dropouts, more than 3 to 1. Several of these places, including the District of Columbia and states with larger immigrant populations, had the widest income gaps between rich and poor.

There are benefits of a tight labor market towards wage-equality for the low-skilled and lesser-educated to consider (that don't require a plague or a war, just a change in government policy). A change in immigration policy isn't a cure-all, but it's the easiest and most effective policy change that we can enact.

ANDREW GOOD works on the Media Standards Project for NumbersUSA and is the former executive director for the Congressional Immigration Reform Caucus

American workers
Legal Immigration
Illegal Immigration
Vulnerable Americans

Updated: Mon, Oct 2nd 2017 @ 3:05pm EDT

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